Nirmala Sitharaman’s Strong Response to Rahul Gandhi’s Criticism

The proposed strategic sale of a majority stake in IDBI Bank has triggered a war of words between the Centre and the Congress. Responding to Congress leader Rahul Gandhi’s criticism that privatising public sector banks would harm employees and the country, Union Finance Minister Nirmala Sitharaman defended the government’s decision and blamed the Congress for the poor financial condition of public sector banks during its tenure. She alleged that loans worth thousands of crores were extended to business groups such as Kingfisher, Videocon and ABG Shipyard under political influence. Referring to the 1957 Mundhra scandal and alleged political interference during the UPA regime, she claimed that influential borrowers enjoyed preferential treatment while ordinary borrowers faced stricter rules. She also cited the removal of former SBI chairman R.K. Talwar in 1976, alleging that he was dismissed after refusing to grant loans to people close to Sanjay Gandhi.

Sitharaman further stated that politically influenced lending decisions had contributed to IDBI Bank’s financial difficulties and that the NDA government had supported its revival through a capital infusion of more than ₹25,000 crore. Defending the proposed sale, she said the bidding process was transparent and that the bank’s valuation increased by ₹3,917 crore in the second round of bidding. She also dismissed Rahul Gandhi’s allegations, comparing them to his criticism over the Rafale deal. The Cabinet Committee on Economic Affairs approved the sale of a 60.72 per cent stake in IDBI Bank to Fairfax Financial Holdings’ subsidiary for approximately ₹52,878 crore. The proposed transaction involves the sale of the Centre’s 30.48 per cent stake and LIC’s 30.24 per cent stake. The government and LIC will retain 15 per cent and 19 per cent, respectively, after the transaction, subject to regulatory approvals and completion of the deal.